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Brazil wins fight over prices of Merck AIDS drugs
Katherine Baldwin
March 29, 2001
SAO PAULO, March 29 (Reuters) - U.S. drug maker Merck and Co. has agreed to slash the prices of two AIDS drugs in Brazil, bowing to pressure from the government, which was poised to break the drugs' patents, the Health Ministry said on Thursday.

After weeks of negotiations, Merck agreed to drop the price of Indinavir by 65 percent -- to 47 cents from $1.33 for a 400 mg dose -- and of Efavirenz by 59 percent -- to 84 cents from $2.06 for a 200 mg dose. The drugs are used in an anti-AIDS cocktail that Brazil gives free to patients in its much-praised campaign against AIDS.

"We consider this a victory," said Paulo Teixeira, national coordinator of the Health Ministry's AIDS program. "But our main satisfaction is to have found an acceptable solution for the country, for the company and for everyone."

Merck officials in Brazil and the United States were not available for comment. The Brazilian government, in its aggressive campaign against AIDS, had said it would break Merck's patent on Efavirenz and start manufacturing the drug in June unless the company lowered its prices.

Under the price accord, Brazil agreed to halt its plans to break the patent, although it reserved its right to do so "whenever necessary, in accordance with national interests," Teixeira said.

The price reduction will save the ministry about 83 million reais ($39 million) out of a $305 million AIDS drug budget. Efavirenz accounts for more than 10 percent of that budget.


With victory under its belt, Brazil now plans to target drug maker Roche Holding AG , which manufactures Nelfinavir, also part of Brazil's AIDS cocktail.

"We have been in negotiations with Roche, but nothing has been agreed on," Teixeira said. "If there is no price accord, we will go ahead and break their patent."

Brazil has become a model in the global AIDS fight, but a law that permits it to manufacture AIDS drugs under certain conditions has angered the pharmaceutical industry, which is trying to punish the country in the World Trade Organization. Under Brazilian law, foreign companies must start manufacturing drugs locally within three years of winning a patent concession or lose exclusive rights in Brazil.

Merck's negotiations with Brazil heated up after the company slashed the prices of AIDS drugs Crixivan and Stocrin for countries in sub-Saharan Africa earlier this month.

Brazil got a smaller discount but accepted the offer, recognizing that it was financially better-off than many African nations, Teixeira said.

Brazil and Merck, however, remain at odds over Efavirenz, a generic version of Stocrin. Merck has threatened to take Brazil's state pharmaceutical company to court for allegedly breaking Stocrin's patent by importing Efavirenz from India. Teixeira said the legal dispute continued, although Brazil was confident it had abided by national laws.

Brazil's activist public health policy has meant that only 0.6 percent of its adult population is infected with HIV or AIDS, compared with the world's estimated high of 35.8 percent in Botswana. But its rate still works out as 530,000 cases.

Starting in 1996, Brazil began making AIDS drugs as part of its policy of free treatment for all patients. It now legally makes eight of the 12 drugs used in the AIDS cocktail.